Alameda Research drops excessive-fee lawsuit against Grayscale
Why it matters: Sam Bankman-Fried's trial is over, but FTX's bankruptcy proceeding is very much ongoing — and the crypto exchange, under the leadership of John Ray III, has been on a mission to recover billions for its creditors.
Flashback: The lawsuit, filed in March, was one of the tools Ray intended to use to "maximize recoveries," per a press release. The argument being that GBTC's high fees and its inability to allow redemptions were costing FTX creditors. (Alameda is part of the FTX bankruptcy estate).
- It attempted to gather other disgruntled GBTC holders to join the suit, but failed to meet a key threshold in time.
- Fir Tree, a hedge fund that sued Grayscale for similar reasons, dropped its suit in July.
Of note: Claims against Grayscale CEO Michael Sonnenshein, Digital Currency Group and DCG chief Barry Silbert were dropped with the lawsuit.
State of play: GBTC's conversion to a spot bitcoin ETF last week would have addressed those issues.
The bottom line: FTX's estate is free to sell GBTC post-conversion, and perhaps, it already has done just that.
Editor's note: This article has been updated with new details throughout.